Alibaba, Tencent and JD.com post slowest revenue growth on record

BEIJING — Chinese tech giants Alibaba, Tencent and JD.com have all posted their slowest revenue growth on record as Covid and Beijing’s tech crackdown took their toll.

Since the fall of 2020, China has fined corporations and scrutinized them for alleged monopolistic practices. A Covid resurgence since March has added pressure to growth, with travel restrictions and stay-home orders disrupting supply chains and logistics.

Reflecting the economic slowdown, e-commerce giant Alibaba reported on Thursday a drop in online shopping for its two main China platforms in the quarter ended March 31.

The company’s total revenue rose by 9% in the latest quarter from a year ago — the slowest on record, according to financial history accessed through Wind Information.

Tencent’s revenue for the quarter was little changed, while JD.com saw a roughly 18% increase from a year ago — both the slowest on record, according to Wind data.

Alibaba shares soared by nearly 15% in New York trading overnight after reporting better-than-expected results. JD.com’s U.S.-listed shares rose by 5%, while Tencent’s climbed more than 1% in Hong Kong trading Friday.

“Macro-sensitive stocks” such as Alibaba and Baidu might temporarily benefit from low earnings expectations, and anticipation that Shanghai is close to ending its lockdown, Jialong Shi and Thomas Shen, analysts at Nomura, said in a note Friday.

“However, we believe the sustainability of this rally will likely be dictated by the pace of recovery for China consumer demand, which the market will likely closely follow over the coming months,” the analysts said.

China’s already sluggish retail sales fell further in April, down 11.1% from a year ago.

Even online sales of physical goods fell, down by 1% — worse than during the initial shock of the pandemic in 2020. That’s according to CNBC calculations of official data accessed through Wind Information.

The Nomura analysts said many businesses were deciding to cut marketing spending as a way to ride out the difficult environment, “which might lead to a belated recovery in the ads industry even if China is completely out of the lockdown mode.”

Alibaba said excluding unpaid orders, gross merchandise value (GMV) saw a “low single-digit decline” from a year ago, according to an earnings call transcript from FactSet. GMV is a measure of goods sold over a set period of time.

The company said its online physical goods GMV in China, excluding unpaid orders, fell further in April, with a “low teens” decline from a year ago. The company said more than 80 cities in China — mostly national economic centers — reported confirmed Covid cases in April. That represents more than half of Alibaba’s China retail marketplace GMV.

For the April to June quarter,…